Los Angeles Wants Its Very Own Super-Speed Internet Service

Los Angeles Information Technology Agency general manager Steve Reneker tells Ars Technica that the city will issue a request for proposals, or RFP, next month for someone to build a city wide gigabit fiber internet service for both businesses and consumers. But there are a few catches.

First, the company must shoulder the entire $3 to $5 billion dollar cost of building the fiber network. Second, the company must offer free service of at least 2Mbs to all LA residents. Third, the company must sell access to the network to competitors.

What does the company that build the network get in return? Well, a monopoly on the fiber infrastructure for one thing. Although it must sell service to competitors, it gets to charge them for the privilege of using the network. It will also be able to sell advertising to offset the costs of the free service.

“The idea is to provide half a billion dollars of incentives over the years,” Reneker says. The city would be a huge customer of the service, and would move all of its network and voice requirements to the new provider — about $9.7 million in business per year. What the city is really hoping is to find a provider that also offers cellular network and data center management services, so the city could move another $50 million worth of tech requirements to one provider.

Reneker also told Ars Technica that he hopes much of the cost of building the network will be offset by selling television service bundles with the internet service — again, just like Google Fiber.

The upfront cost of building the network could be a major stumbling block. Google dealt with this in Kansas City by getting residents to pre-register for the service and charging a one-time $300 connection fee for the “free” service. Google also saved money by piggy-backing on power line infrastructure, which reduced construction costs.

Renker says the RFP will include a list of city assets that would be available to the provider to reduce the costs of deployment. He says that 70% of the city’s power infrastructure is above ground and that the fiber network could take advantage of that. Other assets include 150 city facilities and 140,000 street lights that include solar power.

Although the provider would be required to provide access to every resident and business, the roll-out would likely happen in waves. Reneker says the roll-out would be done in conjunction with a street repaving project, and that neighborhood income and population density won’t factor into the roll out.

This story has been updated to include comment from Los Angeles Information Technology Agency general manager Steve Reneker